Foreign-Born Households will Drive Homeowner and Rental Markets this Decade

The growth of foreign-born households accounted forrna major share of the growth in homeownership in many states over the firstrndecade of the century according to a new report sponsored by the MortgagernBankers Association’s (MBA) Research Institute for Housing America (RIHA).  The report, ImmigrantrnContributions to Housing Demand in the United States: A Comparison of RecentrnDecades and Projections to 2020 for the States and Nation, is a demographic based projection of therndemand for housing by households headed by immigrants. The report was authoredrnby Professor Dowell Myers and Senior Research Associated John Pitkin of the Population Dynamics Research Grouprnat the University of Southern California School of Policy, Planning, and Development. </p

Growth of foreign-bornrnhomeowners has increased in each of the last three decades, rising from 0.8rnmillion new immigrant homeowners in the United States during 1980­-1990 to 2.1rnmillion added in 1990-2000, to 2.4 million added in 2000-2010.  The report projects an increase of 2.8rnmillion in the current decade (2010-2020).</p

Foreign born householdsrnare propelling growth in the rental market as well.  These households peaked in aggregate growthrnin the 1990-2000 decade with a 2.3 million increase but slowed to a netrnincrease of 1.6 million in the next years. rnThe study projects a net growth of 1.3 million in this decade.   </p

In the 2010-2020 decadernimmigrants are expected to account for 32.2 percent of the growth in allrnhouseholds, 35.7 percent of the growth in homeownership and 26.4 percent of therngrowth in renters.  While immigrant homeownershiprnis growing it will be a smaller slice of a larger pie in this decade as the overallrngrowth of homeownership is projected at nearly 8 million as compared to 5.1rnmillion in the 2000-2010 period.</p

Meyers said, “Immigrantsrnare an important and growing source of demand that has bolstered housingrnmarkets in recent decades.  Growth inrnhousing demand in recent decades has been more stable among foreign-born thanrnnative-born households. This is because increases in native-born demand havernbeen subject to large swings in the size of cohorts reaching ages 25 to 34, thernmost common age of entry to the housing market. In contrast, inflows of newrnimmigrants have not varied widely in recent decades, and in addition the strongrnupward mobility of prior immigrants, has led to continued increases inrnaggregate demand for home ownership.”</p

The impact ofrnforeign-born households on homeownership was especially strong in several statesrnduring the last decade.  Immigrants werernresponsible for 82.2 percent of the growth in homeownership in California andrn65.1 percent in New York 65.1.  Thosernhouseholds also accounted for the major share of net growth in Illinois, NewrnJersey, Pennsylvania, Massachusetts, Ohio and Michigan.   This isrnprojected to continue in this decade with foreign born households propellingrngrowth in all of these states but Ohio and in Connecticut. </p

In the 2010 periodrnforeign born households will comprise over one third of the growth in thernrental market in California, New York, New Jersey, Massachusetts, Connecticut, Illinoisrnand the Washington, D.C. metro area,.</p

 “Rising numbers of foreign-born households arerndriven by the continued increases in homeownership rates achieved as immigrantsrnsettle longer in the United States. For example, among the cohort of Hispanicsrnwho arrived in the United States during the 1980s, homeownership rose from justrnabove 15 percent in 1990 to nearly 53 percent in 2010 and is projected to risernto above 61 percent in 2020 when the cohort will have resided more than 30rnyears in the United States,” said John Pitkin Senior Research Associate of the Population Dynamics Research Group at the University of SouthernrnCalifornia.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.